Each Payment on a Mortgage Note Payable Consists of

question 47

Multiple Choice

Each payment on a mortgage note payable consists of

• A) interest on the original balance of the loan only.
• B) reduction of loan principal only.
• C) interest on the original balance of the loan and reduction of loan principal.
• D) interest on the unpaid balance of the loan and reduction of loan principal.

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Definitions:

Fixed Charge Coverage

A financial metric evaluating how well a company can pay off its fixed expenses, like interest and leases, using its earnings before interest, taxes, depreciation, and amortization (EBITDA).

Times Interest Earned Ratio

A measure of a company's ability to meet its interest obligations, calculated as earnings before interest and taxes divided by interest expense.

Financing Activities

Transactions and events that affect the long-term liabilities and equity of a company, including issuing or repurchasing equity and debt.

Financial Assets

Assets that derive value because of a contractual right or ownership claim, including stocks, bonds, and bank deposits.